Pandora Slides as Bracelet Maker Forecasts Sales Slowdownby
Revenue growth may decelerate to half of 2015's pace
Stock drops 7.3%, biggest decline in more than 18 months
Pandora A/S shares fell the most in more than 18 months after the Danish maker of charm bracelets forecast revenue growth this year might be half the pace of 2015, another gloomy sign for the jewelry industry as economic growth slows.
Sales this year will rise at least 14 percent to 19 billion kroner ($2.9 billion), compared with last year’s growth rate of 40 percent, Glostrup-based Pandora said in a statement Tuesday. The stock slid 7.3 percent, the most since July 2014, after the company also reported fourth-quarter profit that missed estimates.
The jewelry industry is bracing for a downturn as weakening economic growth and slumping stock markets weigh on consumer confidence. Last month, Tiffany & Co. cut its full-year profit forecast after holiday sales dropped. Pandora’s forecast isn’t conservative, and Russia will remain a difficult market this year, Chief Executive Officer Anders Colding Friis told analysts on a conference call.
“The guidance is soft,” Soeren Loentoft Hansen, an analyst at Sydbank, said by phone. “The profit miss was largely related to currency headwinds.”
The company also said it would buy back as much as 4 billion kroner of its shares, which fell to 764 kroner at the close of trading in Copenhagen. After rallying 73 percent in 2015, the stock has dropped 12 percent this year.
The chain plans to open more than 250 stores this year after adding almost 400 in 2015. Last year, Pandora accelerated expansion in Germany by assuming leases of more than 70 womenswear stores in that market and converting them into Pandora boutiques.
Pandora is focusing more on the quality of new stores, and 2015 was a “special” year with the purchase of the German stores, the CEO said.
Fourth-quarter profit rose 37 percent to 1.38 billion kroner. The average of seven analyst estimates compiled by Bloomberg was 1.54 billion kroner.